The bid was for pre-fab homes in projects built by Paradise Developments Inc. — a licensed developer currently building homes in the GTA communities of Pickering, Whitby, Brampton, Aurora and Vaughan. Dockery said the seller – Paradise Development Homes Limited (PDHL) – had almost the same name as the developer and a private lender called Empire Finance would provide mortgage finance. For Dockery, who is Black, the terms weren’t indicative of much, but rather one of several major red flags that prompted him to post a warning to a Facebook group for members of Toronto’s Black community interested in real estate. After hearing about a real estate opportunity spread by word of mouth in Toronto’s black community last year, local realtor Horace Dockery posted a warning to a Facebook group telling people he thought the deal might be too good to be true. . (Ryan Patrick Jones/CBC) “The numbers didn’t make sense or add up,” Dockery told CBC News. “Those are the alarm bells that kind of sent off my spider senses and I said, ‘There’s a problem here.’ His post claimed that a group of men were selling Paradise Developments Inc. homes, but convinced buyers to provide deposits to the company of the same name — Paradise Development Homes Limited. In his post, Dockery said that anyone who gave money to this company would be “homeless” and “with a lot of money”. “Our community is the main target,” the post reads. “If it’s too good to be true, it usually is.” CBC News conducted a months-long investigation that revealed Paradise Developments Inc. was trying to prevent a number of individuals and companies – including two that used a similar name – from collecting deposits for homes in its developments. The numbers didn’t make sense or add up. These are the red flags that kind of set off my spider senses.- Horace Dockery, Toronto Realtor The investigation raises concerns about who is running these companies and whether they are operating legally. Amidst all this, questions remain for buyers whose closing dates are still months or a year away and who have collectively paid hundreds of thousands of dollars. CBC News spoke to more than 10 people who say they either gave deposits to people connected to PDHL or Empire Finance, have friends or relatives who made payments, or who heard the sales pitch in person but didn’t invest. Most, but not all, are members of the Black community. Some have raised concerns about the validity of the agreements, while others believe they have legally purchased a home.
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Most would not go on record for fear of losing the deal, fear of offending members of the community or family they bought from, or waiting for their expiration dates. CBC News can’t say for sure whether these deals are legal because the buyers’ closing dates are in the future.
Companies that offered low prices were not registered
Dockery, who is also a licensed mortgage broker, said there was “no way” a private lender would offer such a low mortgage rate. Ron Butler, founder of Butler Mortgage and a 27-year industry veteran, agreed. “The idea that a private mortgage can be offered at 2.7 per cent is so ridiculous, so impossible, they should have picked a better number,” he said. A typical interest rate offered by a private lender over the past year or so would range from 6.5 to 8 percent, Butler said. Ron Butler, founder of Butler Mortgage and a 27-year veteran of the real estate industry, said that in order for companies to offer 30-year mortgages in Canada, they must be designated as approved lenders by the Canada Mortgage and Housing Corporation. (Paul Borkwood/CBC) Butler pointed out that in order to offer a 30-year mortgage, a lender would have to securitize billions of dollars worth of mortgages, which only large institutions like banks are able to do. Another red flag for Butler was the fact that PDHL and Empire Finance were not registered as approved lenders with the Canada Mortgage and Housing Corporation, which, under the National Housing Act, must be registered to offer mortgages with five percent down payment.
The agreement warned buyers not to talk to the manufacturer
A draft purchase agreement provided to a potential buyer by PDHL for a home in the Seaton community in Pickering, Ont., where Paradise Developments Inc. builds houses, contained irregular clauses, according to Dockery. CBC News looked into that deal. The agreement lists the model for sale as “The Eaglewood” — a 2,360-square-foot single-family home that is one of dozens built by Paradise Developments Inc. The purchase price is $705,000 and the deposit amount is $35,250. A purchase agreement for a house provided to a potential buyer by Paradise Development Homes Limited contained a clause, above, suggesting that the buyer must not contact the developer under any circumstances. Another clause, at the bottom, encourages buyers to consult an attorney if they don’t understand aspects of the deal, but it’s deleted. (Name withheld) Dockery said that when he contacted Paradise Developments Inc., he learned that the homes in Pickering Seaton were not yet on the market and had not even been priced, which CBC News later confirmed. That’s information he says potential buyers would know if they contacted the manufacturer, which the agreement reviewed by the CBC specifically tells them not to do. One clause states that the buyer risks losing their deposit if they share information about the deal or contact the developer (Paradise Developments Inc.). a section stating that the purchaser should consult an attorney is deleted. “They don’t want you to ask questions and they don’t want you to share it to be informed,” Dockery said. “That was the biggest concern for me.”
What the developer says
In a statement, Paradise Developments Inc. stated that she has no relationship or business relationship with Paradise Development Homes Limited or Empire Finance and that the two companies do not have the right to market or sell her homes. In the spring of 2021, the developer became aware of “illegal real estate activities and inappropriate use” of its name, marketing and corporate materials, according to an email sent in May by Daniel Salerno, vice president of operations, sales and marketing at Paradise Developments. Inc. A drone photo shows Paradise Developments Inc.’s presentation center. for the New Kleinburg subdivision in Vaughn, Ont. In a statement, the developer said it has no relationship or business relationship with Paradise Development Homes Limited or Empire Finance. (Patrick Morrell/CBC) “We immediately retained legal counsel and began an investigation,” he wrote. That investigation uncovered the developer’s use of marketing materials on Facebook Marketplace, he said. After Paradise’s protest, the platform removed the posts. He said the developer notified police in Peel and Toronto and sent cease and desist letters in 2021 to Paradise Development Homes Limited and another company called Estate Financial. “Our counsel … requested that any deposits be returned to affected buyers or potential buyers,” Salerno said. He said a second round of letters was sent once lawyers learned that a new company called Paradise Development Homes Limited had been incorporated in late 2021 but with different corporate leadership. Peel police said in a statement in May that they were investigating a situation similar to what Dockery described in his Facebook post. A drone captures construction workers doing framing work on a home in the New Kleinburg subdivision being built by Paradise Developments Inc. in Vaughan, Ont. (Patrick Morrell/CBC)
A tale of two companies
Two companies called Paradise Development Homes Limited have been incorporated in the past year and a half, documents filed with the Ontario Business Registry show. The register contains the only electronic documentation for any company. CBC News was unable to find a website or social media account associated with them. The first PDHL was established in February 2021, with an individual named Hassan Zafar as the sole director, according to its articles of association. That company changed its name on Oct. 28, 2021, to Dezi Cars and Autobody Limited and then to Dezi Development Corporation on Feb. 16, 2022, registry records show. Paradise Developments Inc. told CBC News that in 2021, he asked the relevant provincial ministry to force the name change. This was confirmed by a representative of the Ministry of Public and Business Services. A new, separate company called Paradise Development Homes Limited was incorporated on December 24, 2021 — two months after the first one changed its name. This time, the company listed a different director in its incorporation documents — Conan J. Hamdani, a 38-year-old Milton resident. In June, in an unrelated hearing, an Ontario court judge called Hamdani a “career crook.” In 2008, Hamdani was sentenced to 31 months in prison after he and his father were charged with producing and possessing forged passports, traveler’s checks and money orders. In the 14 years since, he has been charged with multiple criminal offences, including fraud, most recently in June 2022. Although there is no public link between the two PDHL companies, CBC News has uncovered a connection. Purchase documents obtained from the e-recommendation firm hired to register the second company show that Zafar placed the order in…
